Impact of Weaker US Dollar on Airlines: What Investors Need to Know for Oman’s Aviation Sector

• By Vinod R Nair
• July 28, 2025July 28, 2025
• airlines jet fuel US dollar
• With 0 comments

According to a recent report from the International Air Transport Association (IATA), airlines experienced modest benefits in the first half of 2025, as the US dollar depreciated by 7% against the currencies of its trading partners.

Jet fuel, which constitutes airlines’ largest expense along with labor costs, is predominantly traded in US dollars. The price of jet fuel decreased by approximately 6% in the first half of 2025, leading to an overall savings of around 12% on fuel costs for carriers that operate outside the US dollar system. This reduction translates into an average decrease of about 3% in total operating costs, as noted in the report.

Additionally, other dollar-linked expenses—including maintenance, aircraft payments, and interest on dollar-denominated loans—also became less expensive for non-dollar-based carriers. In 2024, maintenance accounted for roughly 8% of operating costs, while aircraft ownership, including leasing and depreciation, made up about 11%.

Overall, the combined effect of lower fuel prices and a weaker US dollar on dollar-denominated cost components resulted in an approximate 4.5% decrease in operating expenses for non-dollar-based carriers during the first half of 2025.

In contrast, the Chinese yuan and the Indian rupee showed little change against the dollar, meaning these currencies did not benefit from the general decline of the dollar. On the other hand, the Turkish lira and the Argentine peso suffered significant depreciations of 11% and 14%, respectively. Consequently, carriers in these countries that transact in US dollars will see an increase in their costs when converted to local currency.

Special Analysis by Omanet | Navigate Oman’s Market

The recent depreciation of the US dollar offers significant cost advantages for non-USD-based airlines operating in Oman, translating to lower fuel and maintenance expenses. This shift creates opportunities for local carriers to enhance profitability and competitiveness in a recovering travel market. Smart investors and entrepreneurs should consider the potential for growth in aviation services and related sectors, capitalizing on this favorable financial landscape while remaining aware of the risks posed by currency fluctuations in global markets.